January 15, 2014
This month, Thomson Reuters’ Peer Monitor and the Georgetown University Law Center released the 2014 State Of The Legal Market report. In essence, the study authors found that law firms seem unwilling to change their traditional ways of doing business, even as significant changes buffet the legal industry, and so risk being left behind.
Within the past five years, the study authors note, supply for legal services has outstripped demand. With nowhere to grow, “the only way to most firms can expand market share is by taking business away from others,” the report found. And it isn’t only peers that Large Law firms have to fear; thanks to an increased client appetite for cost savings, Medium Law firms and “managed legal services” outfits like Axiom are siphoning off clients that would have once been the province of Large Law firms.
Now, it is entirely possible that Large Law firms could adjust to this new landscape – they just have not done so. “Law firm leaders must focus their attention on re-thinking their basic organizational, pricing and service delivery models in order to produce competitive success in the long run,” lead study author James W. Jones. “Without widespread change, the legal market may be poised for what could be a dramatic reordering…”
The State of the Legal Market adds to a swelling chorus of calls for Large Law firms to adapt or die. BigLaw 2014: A Look Ahead from Major, Lindsey and Africa, for example, reached a similar conclusion; a contracting legal market served by firms using outmoded business models will likely mean the death of those operations that do not change their ways post-haste.
Now, telling Large Law firms to rethink their very genetic blueprints is one thing, but actually doing it is another. Certainly, it is easier said than done. At this point, though, the consensus that Large Law firms need to innovate is so strong that it is hard to imagine that any measure of innovation would be unwelcome.